Thursday, March 6, 2014
This writing will continue with the "write it down" theme.
Several years ago I co-taught a finance class for a group at church. Most of those attending were single kids in college or just out and we wanted to give them a good foundation to handle their money responsibly.
Here are some highlights...
If you make $100 and spend $101 you are over spending. This happens frequently with CREDIT CARDS! Contrary to popular beliefs, you do not have to have IT right now!
Pay yourself each paycheck. What? Save some money. It is suggested that you save 10% of your paycheck. If you have a program at work that will take that money before it touches your hand, I highly suggest taking advantage of that type of system. Otherwise, talk with an investment company like Edward Jones or any other you know of, and set up a bank draft that moves the money to another account automatically so you are held to the decision.
Set a dollar amount and make yourself wait 24 or 48 hours before you make the purchase. Let's say that amount is $100. You go home and figure out where the money is coming from and then take that money out of savings and go purchase the item. As you start seeing that total dwindle it makes you rethink some of your purchases.
Ready for Rule #1?
Tithe. Find a church or religious organization, i.e. mission ministry, and give them 10% of your paycheck. WHAT! that means if I pay myself and pay tithes then I only live on 80%. Yes, you are good at math so this whole program should be easy peasy for you! The absolute BEST 10% you could ever spend is on a tithe. Even if you don't believe in God (and I'd like to discuss that with you too) tithing is a spiritual law that works for all. You give your 10% and God will bless you financially. It is the one subject in the Bible where he says "test me in this" (Malachi 3:10). For those of you that attend a church - your tithe belongs only in the church where you attend. It doesn't matter if you LIKE what the church is doing. God instructs us to give the first tithe (10%) to the storehouse and then give offerings where we want. If you take God's first tithe and decide you will make the decisions as to how, where, and when it is divvied out, you will not be blessed. If you tell others it is okay to not give your tithes to your church because you don't like brother or sister so-n-so on such-n-such committee - then you are deceiving them and will be held accountable. There is also a little matter of paying back more to the storehouse when you steal from God - but that is another lesson.
Back to the budget smudget!
Here is a suggest step 1 to getting a budget going.
1) Sit down and list every bill you have each month.
Housing (rent or mortgage)
credit card bills
if you are behind on bills this will be a little overwhelming...hang in there! You CAN do this.
life insurance (this might be twice a year)
entertaining - fair, movies, zoo, renting movies, concerts, ball games, traveling
2) Add it all up and then divide by the number of paychecks you recive. Remember to keep this monthly. Now you know how much per paycheck you HAVE to have to keep things even.
If you don't have enough money to get you through the month then begin chiseling things down.
Do you need 165 channels on the TV?
Do you need the newest phone that comes out?
Do you need to eat out 6 times a week?
Do you need a brand new car with huge payments?
Do you need to carry the newest hand bag?
Do you need 15 pairs of jeans?
Remember this asks for need not want. I have found there is truly a difference and it will give you such financial freedom when you discover the difference between those two words.
With your money each month for Gasoline, entertaining, & groceries, get envelopes and put your allotted money back each paycheck. Once the money is gone - so are the groceries or movies or long driving trips. Tough, I know, but you learn to shop differently - what stretches versus favorite cookie - wait for the perfect movie to rent versus something to fill the night. Go to a matinée versus a night movie at the theatre.
This lesson in a nutshell - It's another hard lesson, but learn to think about what your are spending and determine if you can cut some corners to keep your family out of the poor house. Teach your children the lesson too - have them set up envelopes for their allowances too.
You work hard for your money - don't throw it away on things you don't NEED.
A day at a time!
Posted by Tess